Assimilate Solutions India Private Limited Vs DCIT/ACIT (ITAT Delhi)
Assimilate Solutions India Pvt. Ltd., an IT-enabled service provider to its US AE, applied TNMM & showed a margin of 12.53%, which was within the arm’s length range of its selected comparables. TPO accepted TNMM but altered the comparable set—he rejected one of Assessee’s comparables, added nine new ones, ignored the contractual cost-plus range of 5–25%, & assumed a flat 20% margin. He computed a median margin of 19.69% & proposed a large TP adjustment, later reduced by DRP to 18.55%.
Assessee argued that TPO/DRP wrongly included certain companies that failed accepted filters & wrongly excluded a valid comparable. Tribunal noted that ERP Soft Systems had extremely low turnover compared to Assessee, making it non-comparable. However, MAA Business Solutions failed the 75% export filter & WNS Global failed the RPT filter—both were wrongly retained. ITAT ordered their exclusion. It also directed AO/TPO to correct factual & computational mistakes raised by Assessee & to recompute ALP accordingly. Consequential issues like surcharge, MAT credit, & interest were sent back for proper verification.
Thus, Tribunal largely accepted Assessee’s objections, removed inappropriate comparables, & directed fresh computation of TP adjustment. The appeal was partly allowed with significant relief.
FULL TEXT OF THE ORDER OF ITAT DELHI
